The 64-year-old’s victory will bring in a new system transferring all executive powers to him.

Recep Tayyip Erdogan, waves to supporters (AP)

Recep Tayyip Erdogan, who has dominated Turkish politics for the past 15 years, is set to extend his rule and take on sweeping new powers after winning landmark presidential and parliamentary elections.

Turkey’s High Electoral Board declared Mr Erdogan, 64, the winner of Sunday’s polls, which usher in a new executive presidential system which was approved in a referendum last year.

Under the system, the office of the prime minister is eliminated and executive powers are transferred to the president, who can rule with only limited checks and balances.

The Turkish leader, who is accused by critics of adopting increasingly authoritarian tactics but is loved by supporters for bringing prosperity and stability, may be facing rough times ahead, however. Analysts are predicting an economic downturn amid rising inflation and a struggling currency.

His win could deepen Turkey’s rift with Western allies, who are already concerned by setbacks in democracy and human rights as well as Turkey’s closer ties with Russia.

However, Turkey’s currency, the lira, rallied on Monday over Mr Erdogan’s victory, which allows the country to avoid instability in the short-term.

In his victory speech, Mr Erdogan said he would work towards achieving his goal of making Turkey one of the world’s top 10 economies by 2023, when the Turkish Republic marks its centenary.

He also pledged a more “determined” fight against outlawed Kurdish rebels and alleged members of a movement led by US-based cleric Fethullah Gulen, whom he accuses of orchestrating a 2016 failed coup against his government. Mr Gulen denies any involvement.

Large crowds of opposition supporters gathered in Istanbul on Saturday (AP Photo/Emrah Gurel)

According to unofficial results that have yet to be confirmed by the electoral board, Mr Erdogan garnered 52.5% of the votes, while his ruling Justice and Development Party, or AKP, won 42.5% in the parliamentary vote. Mr Erdogan’s closest contender, Muharrem Ince of the main opposition Republican People’s Party, won 30.7%.

Mr Erdogan’s AKP fell short of a parliamentary majority but a better-than-expected performance by its nationalist ally should allow the party to control the 600-seat legislature.

He told reporters: “There are no significant differences between our records and the Supreme Election Council’s records. I accept the results of the elections.”

The politician, who led a robust campaign against Mr Erdogan, called on him to end his divisive policies.

“Be the president of 81 million (Turks), embrace everyone,” he said. “That’s what I would have done if I had won.”

The 54-year-old politician criticised Turkey’s new system, saying: “Turkey has cut off its ties with democratic values… (Turkey) has transitioned to a one-man regime in the fullest sense.”

The pro-Kurdish People’s Democratic Party, whose presidential candidate Selahattin Demirtas was forced to campaign from inside prison, received the more than the 10% of votes required to win seats in parliament, spilling thousands of its supporters into the streets in celebration.